Iraq opening up for major hotel chains

Global hotel chains are starting to look at opportunities to open properties in Iraq.

Iraq has long been off the radar for global hotel chains, as war has raged across the country.
But now, following the declared end of combat, the big international operators, which are rapidly expanding throughout the Middle East, are starting to examine opportunities in the country.
"Yes, we are looking at Iraq," said Kirk Kinsell, the president of InterContinental Hotels Group (IHG) in Europe, the Middle East and Africa.
InterContinental, based in the UK and the world's largest hotel company by room numbers, hopes to be among the first brands to establish itself in Iraq.

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"We're at the early stage in terms of our research," Mr Kinsell said. "But we'll do exhaustive research around issues in Iraq that go anywhere from the right kind of brand to what customers are looking for, what do we think the growth prospects are for hotel product? Also, what we can do to make sure we can bring confidence to that marketplace in terms of both guest safety as well as our employee safety and welfare?"

Although the US has officially declared an end to its combat operations in Iraq, there are still frequent reports of fatal bombings by extremists.

But in anticipation of stability improving, IHG is considering various parts of the country for its hotels.

"There are areas of Iraq that are more safe, and there are areas of Iraq that have constantly had a huge demand profile, like religious and pilgrimage, so those are the first parts," Mr Kinsell said. "But you cannot look at Iraq without thinking about Baghdad as the capital market and having a presence there."

Rotana, the hotel chain based in Abu Dhabi, has already moved into the Iraq market, opening a five-star property in Erbil in December. It also has a property under development in Baghdad.

"For these multinational companies Iraq was not so significant, because they have opportunities all over the world," said Selim el Zyr, the president and chief executive of Rotana. He said the company's move into Iraq was part of its strategy to have a presence in all the Middle East's major destinations. Mr el Zyr said Rotana was also in talks for other Iraq projects.

Millennium and Copthorne also have agreements to manage hotels there.

"We are now operating the Erbil International, which will undergo a US$12 million [Dh44m] refurbishment programme, and then it will be re-branded into the Millennium Hotel," said Michael Marshall, the vice president of sales and marketing at Millennium & Copthorne Middle East. The company is also planning Millennium hotels in Basra and Baghdad, as well as three hotels in Sulaymaniyah.

Some of the owners of IHG's Middle East properties are of Iraqi descent or already have investments in Iraq and are showing interest in further development opportunities.

"We're in discussions with people we're very familiar with," Mr Kinsell said. "Both of us are trying to understand the market." Marriott is another global chain contemplating development in Iraq.

"Iraq and Erbil are very much on our list which we are reviewing and studying with a view to potential development of hotels," said Jeff Strachan, the vice president of sales and marketing for Marriott in the Middle East and Africa.

Other operators looking at opportunities in Erbil in particular include Moevenpick.

Erbil, the capital of the semi-autonomous Iraqi Kurdistan region, has become something of a safe haven and attracted international companies that are using it as a gateway to the oil-rich country. Air traffic is also rapidly increasing, with Etihad and flydubai now offering flights into Erbil. Swiss-Belhotel International, the hotel chain based in Hong Kong, last month announced plans to open a four-star hotel in Erbil early next year. Accor, which has brands including Ibis and Novotel, says it is not in discussions for projects in Iraq, but is monitoring the market.

"We are much more in a position of watching what is happening in Iraq," said Christophe Landais, the managing director of Accor, Middle East.

"The main areas that we would like to develop if we go there would be Erbil, which is to be the commercial hub, and Baghdad. We need to get to know the market."